EN 
DE 
Berlin. Eating out will become significantly more expensive again next year. According to the chief budget managers of SPD, Green and FDP have agreed to raise the VAT rate on food in the food service industry back to 19 percent from January 1. Currently, 7 percent VAT is charged on food in restaurants. The Hotel and Restaurant Association Dehoga reacted indignantly.
"Instead of creating tax fairness and taxing food uniformly at 7 percent, the tax increase to 19 percent from January 1, 2024 will endanger thousands of livelihoods and provoke the loss of quality of life and gastronomic diversity," said President Guido Zöllick according to the press release.
The VAT increase makes significant price increases necessary. "This will hit normal and low earners particularly hard," said Zöllick. He warned of a loss of sales, business closures and job losses - and, as a result, not much higher tax revenue for the state than expected.
Criticism also from Saxony
Axel Klein, head of the Dehoga regional association in Saxony, agreed with the criticism. The signal for citizens is "fatal", he said, because it is not just eating out that will become more expensive, but the provision of food in canteens, care homes and other facilities in general. According to Klein, parents with children, for example, will have to pay 130 euros more per child next year for nursery or school meals. "However, this decision also shows a lack of appreciation for small and medium-sized businesses, which are the backbone of the economy," said Klein. It is not about subsidies, but about a tax injustice "that we have been fighting for 30 years".
Alexander Dierks, Secretary General of the Saxon Unioncriticized: "At a time when we are experiencing a sharp rise in prices in all areas of life, the traffic light is overburdening restaurateurs in particular, but also their guests, with its tax hammer." Parents, residents and relatives would face massive cost increases. "We must not allow the hospitality industry to die out across the board," says Dierks.
Prices have risen by around 20 percent since January 2021
The VAT reduction was introduced in mid-2020, i.e. in the first months of the coronavirus crisis. For some time, only a rate of 5% applied due to a further general VAT reduction, but since January 2021 it has been 7% throughout. The reduction for the catering industry was repeatedly extended due to the energy crisis and the high inflation at times, especially for food. The German government hoped that restaurateurs would not immediately pass on the additional costs caused by energy and inflation to customers.
Nevertheless, prices in restaurants, cafés and bars have risen significantly across Germany in the past two years: according to figures from the Federal Statistical Office, "restaurant services" cost around 20 percent more in October than in January 2021. Compared to February 2022, the month in which the war in Ukraine began, the increase is just over 14 percent.
Are restaurateurs passing on the tax increase one-to-one?
A few examples illustrate what the upcoming tax adjustment could effectively mean for menu prices:
- A salad that now costs 10.70 euros will soon cost 11.90 euros.
- A pasta dish currently costing 15 euros will soon cost 16.68 euros.
- The price of a steak, for example, jumps from 25 euros to 27.80 euros.
- For further examples: The prices now listed on menus will rise by 11.2 percent with the VAT increase.
The prerequisite for the sample calculations is that the restaurateurs pass the tax increase on to their customers one-to-one. If they do not do this, they will earn less with every dish sold than they currently do. As food and energy prices are likely to continue to rise, price increases of more than the 11.2 percent mentioned above are also to be expected.
Corona pandemic still in the bones of the industry
This means that difficult times are likely to continue for the catering and hospitality industry as a whole (including accommodation). The industry had not yet recovered from the coronavirus crisis, with its particularly severe restrictions, when the war in Ukraine broke out and prices suddenly shot up. A few figures show this:
- From January to June, the hospitality industry generated 9.6% more nominal revenue than in the first half of 2019, i.e. before the coronavirus pandemic. If price increases are factored out, the loss in turnover is 10.4%.
- The number of businesses in the hospitality industry was relatively stable before the pandemic and was between 163,000 and 165,000 for years. Around 27,000 businesses had to close in 2020 and 2021, and the figures for 2022 are still missing. Dehoga fears that a further 12,000 businesses could now be lost as a result of the VAT increase.
The restaurant association was not alone in its criticism of the federal government's plans. At the beginning of November, a total of 17 associations campaigned for 7 percent VAT in the catering sector. Among them were the German Farmers' Association, the Federal Association of the German Tourism Industry and the Central Association of the German Bakery Trade.
The pandemic is over
However, there was not only criticism of the decision. Monika Schnitzer, an economist, said on Deutschlandfunk radio on Friday morning: "The coronavirus pandemic is over. It's not reasonable to continue to provide extra support for the catering industry."
And so, in the end, the politicians also decided: on Friday, the traffic light coalition said that 7 percent VAT could not currently be financed in the gastronomy sector. (dpa / SZ)
